U.S.-Iran Relations: Past, Present, and Future

MS. ROBBINS: I'm Carla Robbins. I'm the deputy editorial page editor of The New York Times. And we are very lucky today to have Trita Parsi, who is the author of "Treacherous Alliance: The Secret Dealings of Iran, Israel and The United States". And Dr. Parsi has a long bio, which I think you all have in here. But one of the questions -- I'm not going to ask him about it, but for which I'm totally intrigued -- is how anyone could both have served as an advisor to Congressman Bob Ney and worked for the Swedish permanent mission to the U.N. (Laughter.) So that's what we call intriguing balance.

And we're also very lucky to have my dear friend and old colleague -- not old, but long-standing colleague -- Barbara Slavin, who is currently the Jennings Randolph Senior Fellow -- which is not the William Jennings Bryan Senior Fellow -- at the United States Institute of Peace; and author of "Bitter Friends, Bosom Enemies: Iran, the U.S. and the Twisted Path to Confrontation". Barbara's been a senior diplomatic reporter for USA Today since -- for 11 years?

MS. SLAVIN: Eleven.

MS. ROBBINS: Eleven -- 11 years. She's been a foreign correspondent in the Middle East and in Asia. And both, obviously, know an enormous amount about Iran so we're both very lucky to have them.

You all know what the drill is. I'm going to ask questions for a while and then we'll throw it open to you all. I'm also supposed to note that both authors' books are for sale out there. And since you're all hedge fund managers, you should buy three or four of them -- (laughter). Please. Anyway, I'm waiting for my review copy, actually.

Anyway, I suppose because I'm in the news business, I did want to start with a news question. I don't know if you all have seen this, but there was a very bizarre confrontation, apparently -- according to the Pentagon, the Iranians haven't commented on it -- in which several Iranian, I suppose, small attack ships approached U.S. ships in the Straits and threatened them -- said that they were going to explode them. And it apparently came very close to the U.S. shooting, and then the Iranians turned around and went away.

So the puzzling question -- and we'll just do this one both really quickly for both of you -- the present question is: What's the game and why would they possibly want to do something like this?

Trita, do you want to start?

MR. PARSI: I think there's probably two possibilities -- to simplify.

First of all, I would like to say that we don't know enough yet, particularly when we take a look at the quote that AP has run that they were radioing the U.S. ship and saying that you're about to die or explode in a couple of minutes. It sounds very strange to me. I would like to see some additional reporting to see if they can verify that. Because if you look at the pattern of Iranian confrontation with the United States, they've actually been very, very cautious. It's one thing to take a couple of British sailors -- I think they have the stomach to be able to do so. But they're very careful about not unnecessarily provoking the United States, particularly with a gentleman like George Bush in the White House. So I'm a little bit curious to find out a little bit more what has happened -- if the original reporting was accurate or not.

But then there's another element, which is that they have been -- and there probably still is -- elements in the Revolutionary Guards that are even more radical than Ahmadinejad, and may not be very happy about what seems to be going on behind the scenes: some maneuvering between the United States and potential for some sort of a diplomatic breakthrough -- however small it yet may be, there's some indications. And this is an excellent way of being able to derail that.

We've seen that pattern in the past that whenever the United States and Iran have gotten a little bit closer to each other there are elements on all sides that have tried -- and often times successfully been able to derail that. So that may very well be what is going on.

MS. ROBBINS: Barbara?

MS. SLAVIN: I think the timing has to be connected to President Bush's trip to the Middle East, which starts tomorrow. What better way to remind the United States, what better way to remind the nations of -- the Arab nations of the Persian Gulf that Iran has tremendous ability to create havoc? Iran is an important power. President Bush may be spending a good bit of his time talking about containing Iran and isolating Iran, and so this is a great way to show that Iran cannot be contained; Iran cannot be isolated.

MS. ROBBINS: Barbara, you're such an experienced watcher of the Bush administration. A few puzzling things have happened in the last few months, and maybe you can interpret them for us.

One, of course, is the National Intelligence Estimate. Although, personally something that I do write about, I didn't find it as comforting as some people thought it was. I think they've probably just figured the game out, which is that you can do this publicly. Why do you have to hide it? I mean, Japan is a perfect example of that. There's that.

There's also the Pentagon's suggestion that there's been a decline in these very powerful IEDs -- the EFPs -- coming across the border. Other suggestions -- you know, the Iranians have canceled one meeting, but they have gone to some other meetings. Are the Iranians behaving better? Are the Iranians looking for some sort of accommodation with the U.S.? Is there some sort of secret thing going on that we don't know about? MS. SLAVIN: I wish there were. I don't think there is. I think the Iranians are simply being very clever. I mean, they keep all their options on the table. It's suits their purposes now, I think, to tone things down a bit in Iraq, because the United States has already begun to withdraw. Their Shi'ite allies are doing extremely well.

One of the reasons I think the Iranians acted to tone it down a bit is because there was some very dangerous infighting going on between its Shi'ite allies in Iraq, and Iran wanted to calm that down. They read Muqtada al-Sadr the riot act. I think that's one of the reasons that he imposed a ceasefire on his forces in Iraq.

On the National Intelligence Estimate, you know, a lot of us thought it really was the intelligence community staging a preemptive strike on those few members of the Bush administration who still did think that it might be advisable to mount a military strike against Iran before Bush leaves office. But you're absolutely right: Iran has continued its overt program, which is really the most dangerous aspect of it; however, it has opened -- it's opened the debate in Iran. And we can talk about this a little bit more.

You know, Iran has parliamentary elections in March. And one of the reasons, perhaps, that these Revolutionary Guard types in the Straits of Hormuz maybe wanted to shake things up a bit is because tension and conflict would help Ahmadinejad and his side in the upcoming parliamentary elections; whereas the NIE kind of pulled the rug out from under him. You know, no one could say the U.S. was about to attack anymore and so he couldn't, you know, benefit from this atmosphere of tension. Lots of games within games that are being played, I think, in that system -- as Trita pointed out.

MS. ROBBINS: So are there more games within games being played in Washington or in Tehran? (Laughter.)

MS. SLAVIN: You know --

MR. PARSI: They're better at it.

MS. SLAVIN: I wish. I just don't think that this Bush administration -- we can talk -- my book, Trita's book talks a lot about missed opportunities in the last six, seven years. And at this late stage, I think the best we can hope for is a bit of a toning down of tension. I just don't see any grand reconciliation.

MS. ROBBINS: Trita, what's the story on their nuclear program? What do you think's really going on?

MR. PARSI: Well, I think they definitely are looking for a nuclear option, being -- as you mentioned -- like Japan or Sweden or Belgium -- having the capability to be able to go for a nuclear weapon, but stopping short of that. And that is exactly the same approach that the Shah took during the 1970s. He wanted to have the option, but he also recognized the strategic disadvantage for Iran to actually go for a weapon.

Iran has been able to play a strong leadership role in the region for the last 3,000 years more often than not because of its strategic conventional superiority. If Iran, however, as a large state goes for nuclear weapons, sparks a nuclear race in the region, causes smaller countries such as Bahrain and Kuwait to either get one or buy one, then Iran will have put itself at strategic parity with these much, much smaller states and they would have eliminated its national conventional superiority.

So the Iranians do have strong incentives not going for a nuclear weapon, but because of them living in a very tough neighborhood, they definitely want to have the option. And I think that's what they're aiming for now. I don't think they have made a strategic decision to go for a weapon, but if tensions between the United States and Iran were to increase further, then that decision would probably be reassessed.

MS. ROBBINS: You know, it's -- for those of us who've covered these things for years, we've all -- everybody's decided the NIE is absolute truth after we swore after Iraq we were never going to consider an NIE absolute truth. (Laughter.)

But let's just for a moment -- because it lessens the possibility that we will have World War III on George Bush's watch -- knowing what you know about Iran, Barbara, if they dropped the clandestine program in 2003, why? I mean, that's not all that long after 2002, when the Israelis using the MEK made their announcement about the existence of Natanz. One could say that the second they got caught with their hand in the cookie jar that they decided to go for the public option. They just couldn't hide it anymore. Or was it the war in Iraq that did it?

I mean, what's -- we, of course, all believed that the war in Iraq would have the exact opposite effect on Iran and it would make them want to rush faster toward a nuclear weapon. What's the difference between, you know, North Korea and Iran? The North Koreans already had the weapon. So what's your interpretation for that timing, keeping in mind that perhaps the intelligence community doesn't have a clue what it's saying?

MS. SLAVIN: True. No, I think you're right. I think they got caught with their hand in the cookie jar. The centrifuge facility at Natanz was exposed by the Mujaheddin-e Khalq -- perhaps with help from the Mossad, we don't know -- and another facility. And so they were caught. They didn't want to be kicked out of the NPT. They didn't want to lose that option, so they realized they would have to open their facilities, at least to some extent, to the IAEA.

I think the U.S. invasion of Iraq was also a factor. Certainly for a couple of months there in the spring and early summer of 2003, the Iranians were nervous that they might indeed be next. But I think that fear dissipated rather rapidly after the U.S. got bogged down in Iraq.

There was another National Intelligence Estimate that I wrote about in my book that came in January of 2003 -- it was a National Intelligence Assessment, excuse me, not an estimate; so I guess that's a peg down -- that by toppling Saddam Hussein, this would spur both Iran and North Korea to accelerate their nuclear programs. So they did -- they did stop for a while. They even halted the Iranian program for awhile, but of course, long term they have accelerated the uranium-enrichment program, which is the one that will give them the capacity to make a bomb if they so choose.

MS. ROBBINS: Trita, how much is the Iranian economy hurting from outside economic pressure? And you know, there was this time about -- I suppose a year ago, or maybe it was two years ago, I suppose, when it started -- when banks -- it was after Vice President Cheney gave his interview, his radio interview the day of the second inauguration, I suppose, in 2004 when he said that -- suggested that there might be a dust-up with the Iranians. And then the banks started rethinking.

And this was not the result of an organized Security Council push, but more the fact that people began to worry about it. And of course, Secretary Rice went to Europe and said, I'm shocked that anyone could possibly imagine we'd be considering military action.

But it was -- I think even the sort of saber rattling did have an effect in European banks and some other companies. I mean, how much of an effect is that having on the Iranian economy and is it just totally offset by the price of oil?

MR. PARSI: In general, the sanctions that have been imposed on Iran actually have been effective in inflicting a cost on the Iranian economy. But none of the sanctions that have been imposed in the past -- and I would venture to think that none of the ones that feasibly could be imposed in the future -- will be able to translate that economic cost into a change into Iranian policy. We have not seen that in any single case with Iran so far. On the contrary, whenever they've been put under more sanctions, they've actually even become more aggressive in their policies.

The additional financial sanctions have, again, created cost for their policies, but it's not changed their policies. And in fact, what we've seen on the Iranian side is, particularly after the missed opportunities -- and both Barbara and I write extensively about the 2003 proposal that was sent that the Bush administration rejected. The effect of rejected offers from Iran has been that those in Tehran who argued that you cannot make friends with the United States by offering goodwill gestures or offering negotiations, you can only do so by making it as costly as possible for the United States not to negotiate. And I think that's what we've seen in the last couple of years.

We're saying we're going to make it costly for them to pursue a nuclear program. They're thinking, we're going to make it costly for the United States not to negotiate. And that means that wherever they can be problematic against U.S. policies in the region, they've taken the opportunity to be so. MS. ROBBINS: And I do want to get into the 2003 offer, and a little bit about the personalities and all the different players in this, but before we do that -- just really, quick, Barbara -- how fragile is their economy? We hear a lot about capital flight to Bahrain and to the Gulf, hear a lot about high inflation level itself.

Ahmadinejad was elected by promising domestic issues, by promising an improvement in the domestic quality of life and an end to corruption -- neither which seems to have taken place. Is it a fragile economy itself or is, as long as oil prices hover in the 90s, are they fine?

MS. SLAVIN: They're not fine. And I think we'll get a better sense of how important this issue is in March, because the economy is really the -- one of the key issues in the parliamentary elections that are coming up. Inflation is definitely over 20 percent. Unemployment is still really high.

The other side of it, though, is that they have been able to take a lot of this oil money and spread it around, particularly in the rural areas and the provinces. So this is where Ahmadinejad still has some support. It's a policy of handouts, so it's not going to work in the long run. It's not creating productive investment. It's not creating jobs for Iranian youth, but they can limp along.

I think Iranian businessmen are complaining. The people in the bazaar are complaining. It's very hard to get letters of credit. The banking sanctions have been the most effective -- really cumbersome and difficult. People are having to travel with suitcases full of cash now in order to do business. So this could boomerang against the regime.

I'm a little less -- you know, I think it has had an effect. I think it could have an effect on their nuclear policy on the margins, but we'll have to wait and see how it plays out in their political contest coming up.

MS. ROBBINS: Can you give us just -- can you give us a very quick summary of the 2003 offer, for those of us who haven't read your book yet?

MS. SLAVIN: Well, both Trita and I have it printed in the back of our book. I have a version that shows the final edits that were made by Javad Zarif -- who many here know was the Iranian ambassador to the U.N. -- and Trita has it without the final edits.

But it was a trial balloon. It was an agenda for talks between the United States and Iran. It listed Iran's concerns. It listed U.S. concerns, and then it had a mechanism for announcing the beginning formal negotiations. And it listed all of the issues that are of concern to both sides -- including the nuclear program, Iran's policy on Israel. It suggested that Iran would be willing to talk about the two-state solution, the Arab League proposal that Iran would scale back its support from Hezbollah and Hamas. But of course, in return, Iran wanted economic sanctions considered, U.S. protection for the Mujaheddin-e Khalq. All of their concerns were listed as well.

I mean, it was a very sensible document and unfortunately, it never got a response from Washington. It simply was ignored.

MS. ROBBINS: Trita, who was behind this and what was going on there?

MR. PARSI: Well, just different stories about who was behind it. The Iranian side of the story is that it was actually an American proposal that they just responded to. And it may be, because politically those individuals who were involved in it need to protect themselves. They're the same individuals who are arguing in Tehran that we need to help the United States in Afghanistan, and if we help the U.S. in Afghanistan, the United States will have a more favorable view of Iran. That ended up not happening. Instead, Iran got into the Axis of Evil. So they needed some protection, perhaps, to be able to pursue this by saying, well, this is an American response. It would be rude not to respond to this proposal. And that's where these edits are coming in from.

There is an element there that actually may be true, because some of the individuals in the Bush administration had been attending various conferences and talking to various Iranian officials. And there had been an order by Colin Powell to prepare a contingency peace plan with Iran, right after 9/11. And it may very well have ended up being so that the Iranians got wind of this proposal, because the individuals who drafted it were intimately involved in negotiating with the Iranians in Afghanistan. And as a result, the Iranians thought, well, if we propose something that they themselves had already prepared, how can they possibly say no? Well, they did say no.

So there's still a lot to be found out about what the origins of this proposal was. But I would say one thing: I think the proposal should be read from the back to the front, not from the front to the (beginning ?). If you read it from the back to the front, you see that there is a process of how to go from stage one to stage three in which at the end, you would achieve what is on the first page of that proposal, which are the different aims. Basically, they have put the pie in the sky on the table and then a mechanism of how to reach it.

So I wouldn't read the proposal as saying, well, they were just willing to talk about it. This was the pie in the sky on the table. And if the process was gone the right way, it was only about finding a way to reaching that pie in the sky.

At the end of the day, even today, if there is some sort of a deal to be made, I think the contours are still going to be the contours of what we see in that document. The price, however, is going to be different, because we have spent three years making more mistakes and the Iranian position as grown stronger.

MS. SLAVIN: Can I just add, I was told that it was actually -- the initiative came from Sadegh Kharazi, who was the Iranian ambassador in France at the time, the nephew of Iran's then-foreign minister, and the brother-in-law of Ayatollah Khamenei's son. This is the supreme leader. And it was put together also with the help of Tim Guldimann, who was the Swiss ambassador in Teheran at the time. And the Swiss represent U.S. interests in Iran in the absence of diplomatic relations, and I think a lot of the wording came from Guldimann.

The Iranians claimed, some of them claimed to me that Richard Armitage was the one who had put together a proposal for engagement and that they were responding to Armitage's overture. But Armitage denied this and, you know, I don't think his role was necessarily crucial in it.

I mean, I think the Iranians knew quite well what the issues were and, as Trita points out, they're the same issues that remain on the table today and would remain on the table.

MS. ROBBINS: Well, when you think about it, it doesn't really matter where it started, because if there is a common language and a common sense of what the agenda is and a willingness to discuss an agenda, then it really didn't matter -- as it doesn't matter, ultimately, if it was embraced -- but just within the Bush administration itself, what happened?

Did this thing come by mail? Did it come by fax? You know, did it get lost? (Laughter.) It was sent from the Swiss Embassy in Teheran to the Swiss Embassy in Washington by secure fax, which is the way that all these messages are passed from the Swiss. And then it was hand-delivered by a Swiss diplomat to the State Department's Department of Near East Affairs. This is the way such things would be transmitted. It isn't some mysterious thing that popped up, you know, that was thrown over the transom, as it's been described by some. It was absolutely delivered in the normal way, and was a regular Iranian communication to the United States. I might add one other thing, and I think one of the reasons -- there was a lot going on during this period. I mean, there were U.S. talks with Iran from the fall of 2001 through May 2003.

MS. SLAVIN: The date is May of 2003?

MR. PARSI: May 3rd.

MS. SLAVIN: This popped up -- this popped up May 3rd, early May. And it was just at the same time that, as luck would have it, I had a front-page story in USA Today, writing about the high-level, authorized, secret talks that had gone on between the U.S. and Iran from the fall of 2001 through May 2003, which came out as -- I don't know how embarrassing it was for the Iranians, but it was extremely embarrassing for the Bush administration.

Because here they were, they'd been caught actually having these kinds of discussions with a member of the axis of evil, and so there was a lot of fluster and bluster. And they cancelled these talks. They used as a pretext bombings in Saudi Arabia by members of al Qaeda; they claimed there was some connection between these people and al Qaeda detainees in Iran. Anyway, this offer pops up, you know -- comes in just at the same time that all of this is happening, so I think it made it more difficult for the Bush administration to grab hold of this offer.

But it was seen all the way up the chain of command in the State Department. Powell saw it. Condoleezza Rice says she does not remember seeing it. Other members of the National Security Council do.

MS. ROBBINS: But do we know -- I mean, the people in the State Department, of course -- at the time this would be, you know, it would have been Powell and Armitage and Burns --

MS. SLAVIN: Armitage, Bill Burns, right. Bill Burns, yeah.

MS. ROBBINS: -- who were all the people who were very much -- Bill Burns is now the ambassador in Moscow -- people who would be interested in the word "engagement," a word that I gather the secretary of State told you she doesn't like.

MS. SLAVIN: Yes. Ms Rice told me she doesn't like the word "engagement." (Chuckles.)

MS. ROBBINS: So, do you -- do we know what happened when it got to the White House? I mean, did Dave Wormser tear it up in Cheney's office? I mean, what happened?

MR. PARSI: (Inaudible.) The same day or the day after that Ambassador Guldimann delivered the proposal to the State Department he also visited the office that I was active in at the time. I was advising Congressman Bob Ney. Ney had lived in Iran for about nine months before the revolution, and he spoke Farsi. And Tim used to come -- or the Swiss ambassadors tend to come every six months to give a briefing at the State Department on what the situation in Iran is. At the end of the day, they're supposed to be America's eyes and ears in Iran, absence of an American embassy. And he always tried to pass by Congress as well, because he knew of Ney's deep interest in Iran and his knowledge about it.

And I saw a copy of that proposal at that visit and remember being very, very surprised and shocked. Didn't really expect something like that, although there had been conversations, dinners on Capitol Hill in which Zarif had come and they had arranged it in which elements of this actually had been discussed. And I write about it extensively in the book.

Ney knew Karl Rove since about 20 years before, and he immediately sent a staffer over to the White House to deliver it to Rove. Rove called back within, I think, two hours. They had a brief, five-minute conversation. He said that the proposal was intriguing; he wanted to know about the authenticity of it, and he promised to show it to the president.

The next thing we hear back is in the Financial Times. Guy Dinmore has a story saying that the Swiss ambassador got reprimanded for having played a part in delivering the proposal. From what we heard elsewhere is that basically within the administration there was a debate -- not necessarily very high, not necessarily serious, but the argument basically came down to whatever the United States can achieve by negotiating with Iran, it can achieve even more by simply removing the government in Teheran. And again, mind you, three weeks earlier Saddam had been removed. So there was a tremendous amount of confidence in the White House at the time.

There's one other aspect of this that I think is very important. About two or so months prior to the proposal being sent to the United States, the Iranians had Mohsen Rezai, who is the former head of the Iranian Revolutionary Guard Corps attend a conference in a southern European capital sponsored by an American university, funded by the Pentagon, that brings together about two (hundred) or three hundred people from the region, as well as Europe and America. It's an excellent, recurring arena for track two and behind-the-scenes diplomacy, and it's a place that the Israelis tend to visit in very large numbers.

Rezai deliberately went there, had a closed session with several of the Israelis as well as Palestinians, presenting not a peace plan to Israel, but a proposal on how the United States and Iran could improve their relations. But the key audience in the room were the Israelis. And the signal that was intended to be sent was that if this deal is made between Iran and the United States, it would not come at the expense of Israel, because Iran recognized that it needed to change its position on Israel in order to improve its relations with the United States.

I spoke to several of the people who were in the room, including Zaef Shef (sp), one of Israel's most respected journalists, who passed away last year. His sense was that he had heard similar things very recently prior to that. He felt that it was a genuine indication of policy. He didn't trust the Iranians; I don't think anyone in Israel would. But he agreed that it was a mistake not to pursue it further to see where it possibly could lead.

MS. ROBBINS: So we have a -- what we would put on a list of gross diplomatic negligence on the part of the Bush administration. This has all been past -- talking about the past.

And my time is up, so I will throw this open to you all. I hope you -- (inaudible) -- many things that could be spoken about, including the upcoming elections, Ahmadinejad's future, and the future for what could the next president of the United States do to try to recoup this situation. So those are just some of the things that like -- could continue. Let me just say that --

You're supposed to wait for the microphone and speak directly into it. I forgot to tell you all to turn your BlackBerrys and cell phones off a long time ago. (Laughter.) When you're called on, please stand, state your name and affiliation, and please limit yourself to one question and keep it concise, to allow as many members as possible to speak.

Q I'm Kenneth Spialken (ph). I'd like to ask you how seriously the world, we and others, should take Ahmadinejad's statement that if they had the bomb they would use it against Israel, which should be eliminated.

MS. ROBBINS: Ms. Slavin (?) said that.

Q Or words to that effect.

MS. ROBBINS (?): He actually -- he's never said that.

Q Israel -- that Israel should be eliminated and that would be his objective.

Now, in diplomacy, one never really believes anything anybody says or takes it as truth. But that threat having been made and not having been disavowed by the supreme leader, and it being currently understood to be a serious possibility, how seriously should that be taken as a threat by the world, and how seriously should that be taken as a threat by Israel?

MS. ROBBINS: Well, first, let's make clear what Ahmadinejad actually said so --

MS. SLAVIN: He never -- he never said that. He never said that he would drop a bomb on Israel. There was a statement made by Rafsanjani, the former president, a couple of years ago that it would take only one nuclear weapon to destroy Israel, the implication being that Iran somehow could survive.

Ahmadinejad has said that Israel should be wiped off the map. He was quoting Ayatollah Khomeini, who had said that. And then actually, after he said that, the current supreme leader came out and said Iran is not interested in seeing any country destroyed -- corrected the record right after that, but no one paid any attention.

The Iranian regime has as one of its tenets that Israel is an illegitimate state in the Middle East. The way Ahmadinejad explains his view now, though, the way he did when he was in New York at the General Assembly, is that he believes that Israel is like the old Soviet Union. It will wither away and die because of its own internal contradictions, that Iran does not have to do anything to bring this about. So it's a little different.

MS. ROBBINS: That said, I mean, Iran, of course, is a major sponsor of terrorism, supporter of Hamas and Hezbollah, which are committed to the destruction of Israel, depending on the way they define it.

So let's ask -- now we've set straight the actual language, does Iran pose a mortal threat to Israel?

MR. PARSI: No. That would be the short answer. Not because Iran doesn't pursue very negative policies towards Israel, not because there are not elements in Iran that really, really dislikes Israel, but because of the fact that at the end of the day, let's not forget that the Israeli state has 200 nuclear weapons and Israel has a second-strike capability. As Ariel Sharon's spokesperson told me, whatever Iran does against Israel, it can never destroy Israel's capability to destroy Iran in return.

And that's just the reality. Does it mean that Israel should be relaxed about the rhetoric? Absolutely not. I think the rhetoric is very problematic. It poisons the political atmosphere. It certainly does not help, though, that only negative comments tend to get attention in Tel Aviv and in Washington, and a lot of comments that are more conciliatory or more nuanced tend to be dismissed as being the Iranians just playing tricks. But nevertheless, when you take a look at Iran and Israel's relations over the last couple of decades, you see a very, very complicated picture. And you recognize one thing that is very problematic with Iran is the differentiation between Iranian rhetoric and their actual policies.

In the 1980s the Israelis were very happy with that, because in the 1980s Iran was saying very, very aggressive things about Israel, calling Israel a cancerous tumor, and the only thing you can do with a cancerous tumor is to remove it. Yet at that time, the Israelis were the ones who were lobbying Washington, telling Washington to sell arms to Iran, to talk to Iran and not to pay attention to Iranian rhetoric, because the Iranian rhetoric was not reflective of Iranian policy.

And in reality, Iran was not acting aggressively against Israel in their operational policies in the '80s because they needed Israel. Israel was, together with Vietnam, the only two countries in the world that had access to American spare parts, which the Iranians were in dire need of. And the Israelis were very eager to utilize that in order to bring Iran back to the Western fold. And this was done not by some minor element in Israel. This was done by Shimon Peres; this was done by Rabin.

So where -- I agree we cannot dismiss rhetoric, we also have to know history in which we, for an entire decade, very gladly dismissed rhetoric.

(Cross talk.)

MS. SLAVIN: Can I just add -- yeah, very shortly, you know, Ahmadinejad is not addressing you. He's addressing the broader Muslim world, particularly the Arab world. When he makes these statements, he's trying to embarrass the Arab rulers of the region who are allied with the United States. He wants to show that Iran is more Palestinian than the Palestinians. He wants to excite the Arab -- (inaudible) -- and indeed these comments have made him popular in places like Egypt. They don't make him that popular in Iran, where most people that I met could care less about the Palestinian question. So he's addressing that.

He's also trying to make the reform movement and others in Iran who disagree with him, he's trying to embarrass them as well and make them look bad and distinguish himself from them by using this rhetoric.

So I think you have to examine the motivation and not just take the words at face value, although they are not very nice words, that's for sure.

MS. ROBBINS: Let's move on. I'm going for gender balance here. (Chuckles.) Here you go. Something the Iranians do not --

Q I wasn't going to ask a gender question, if that's okay, although you might have expected it. (Laughter.)

MS. ROBBINS: (Inaudible.)

Q You both know the past thoroughly.

MS. ROBBINS: I'm sorry; you're supposed to -- can you --

Q I'm sorry. I'm Cora Weiss from The Hague Appeal for Peace.

You both know the past thoroughly. What do you know about the future? It's very important for people to try to understand what options the administration has. They're still in power, and they're facing a lot of lack of success. What are they going to do about Iran?

MS. ROBBINS (?): Go for it --

MR. PARSI: I would say the country I'm most concerned for right now is actually Israel. I think Israel is in a state of strategic paralysis. It is playing the chess game as if the chess board is exactly the same it was a decade ago, as if Iraq did not happen, as if Iran does not already have 3,000 centrifuges. As if the United States has not weakened itself so significantly in the region. As if Hezbollah did not poke a huge hole in the Israeli perception of its deterrence and its invincibility.

And it's pursuing a policy of hoping that, A, the military option against the nuclear facilities will still be considered a viable option; consider the isolation and containment of Iran as a successful path. Whereas in reality over the last 15 years in which that policy has been pursued has really not produced an isolated Iran -- particularly not now, when we see that the Arabs are increasingly convinced that the United States is bound to make some sort of a deal with Iran and, as a result, they're quickly adjusting themselves. And they're inviting Ahmadinejad to do the Hajj and they're holding his hands as he's entering into the room at the GCC meeting.

Everything is changing, but Israel is pursuing the same policy, not recognizing that the fundamentals has changed. And that, I think, would be very detrimental to Israel itself. Israel has, for more than a decade and a half, believed that the U.S.-Iran dialogue would be detrimental to Israeli interests because in that dialogue, the U.S. would inevitably sell out Israeli security interests. The deal would come at Israel's expense.

But at this stage, I think Israel should utilize its friendship with the United States and its ability to influence things here to ensure that in that dialogue its security, its interest, is respected and it is on the agenda. And I think that would be a much more successful path than to continue on this autopilot that Israel currently is on.

MS. ROBBINS: But given how things have somewhat cooled out, except for yesterday's --

MS. SLAVIN: (Inaudible.)

MS. ROBBINS: (Laughs.) Yes. He threatened to explode. Is there anything in the waning days of the Bush administration that will change on Iran, do you expect?

MS. SLAVIN: I don't think there'll be major changes. I think that the best one can hope for will be a continuation of the meetings that started last year over Iraq. These are three-way meetings. The Iraqis are in the room and you've got the American ambassador in Iraq and the Iranian ambassador, and they have talked about security issues.

We might see some more multilateral diplomacy, another meeting of Iraq and its neighbors and the United States where there might be some discussion as well. And I can see that if the U.S. tones down its rhetoric a little bit, these might be productive. But, you know, we have a policy where the U.S. is still talking about isolating Iran and then we have President Bush running around the Middle East this week talking about isolating Iran, still taking about more sanctions. I'm not sure where he's going to get on that, because the NIE has also made it, I think, much more difficult certainly to get U.N. sanctions.

The Iranian ambassador in New York has gone home for a month, which shows you how worried he is about another resolution. (Mild laughter.) And it was just, what, a month or two ago that everybody was talking about another U.N. resolution against Iran. Well, obviously it's not coming any time soon. MS. ROBBINS: Plus, el-Baradei's going to Teheran next week to try to resolve the outstanding --

MS. SLAVIN: Outstanding issues. We've seen some more Iranian cooperation on the nuclear front.

So my concern is that, with the Israelis again, the actual reduction in tension could be more of a spur to Israelis who want to stage an attack. They would figure they'd better do it now while Bush is in office, because he'll -- you know, he'll condone it. He won't complain. And who knows what would happen when the Democrats come in. And they're more worried that the sanctions front is not going to work.

Hopefully, people will do nothing at least until March, until we see how these parliamentary elections go. Because anything that happens outside could have an impact on the internal political dynamics, and right now, you know, I think it's best to leave things as they are. (Chuckles.)

So looking forward, what's the best-case scenario? You get a repudiation of Ahmadinejad, in March the parliamentary elections, more quote-unquote "reasonable" types coming to the fore in Iran.

The supreme leader of Iran made a very interesting comment last week. He gave a speech in Yazd to a bunch of students where he repeated the usual anti-American rhetoric. But then if you went sort of down into the weeds of it, he said, oh, by the way. We never said that we would -- that it would be forever that we would have no relations with the United States. And he said when it's in Iran's interest, I will be the first to approve of it.

So was he sending a message to this administration, or was he sending it to the next administration, which might have a radically different policy on Iran. Something to put out there.

I think the Iranians again are, in their typical way, trying to show that there are a lot of ways in which they can play this, depending on what they see from the outside.

MS. ROBBINS: (Off mike) -- John.

Q Thank you. John Brademas, New York University, 3rd Congressional District of Indiana. I used to see, when I was in Congress, a great deal of Ardeshir Zahedi. The last I heard, he was living in Switzerland, in Montreux.

MR. PARSI: Geneva.

Q He was a very popular figure in Washington, D.C., during my time there. This may be a naive question. Is there any role for somebody like Ambassador Zahedi at this stage of the relationship between our country and Iran?

MR. PARSI: I think remnants of the old government in Iran do not play much of a significant role, although Zahedi is someone that does frequently comment and is actually widely respected in many circles. Interestingly enough, he has completely backed Iran's current position on the nuclear front, and he is adamantly opposed to the slightest compromise on Iran giving up its right to enrichment.

But what I think your question also points to is the other Iran. There are other Irans. It's not just this government. And one of the saddest things, that I think we have not discussed sufficiently in Washington and New York over the last couple of years as the tension between the United States and Iran have increased, is that that has directly affected and minimized the room for maneuvering for Iran's pro-democracy elements inside the country.

I'm not talking about the wannabe Chalabis in L.A. or in Washington, but the people on the ground that are making small steps to be able to bring democracy to Iran, building the Iranian civil society. They have been the first victims in the tensions between the two countries, that obviously, Iran itself is very much responsible for. And they're oftentimes forgotten.

For some reason, we think that as we increase the tensions, we're bringing hope to the democrats in Iran. It's quite the opposite. And particularly if there were to be a military strike, whether by the United States or Israel, which I don't think is likely, the first thing that would truly do is to kill the cause for democracy in Iran, perhaps with as much as for two entire generations. You cannot create a sustainable democracy under those circumstances.

MS. ROBBINS: We have a good question here from one of our national members, from John Kelly, who is at the Sam Nunn School of International Affairs in Atlanta. Are there differences in the policy approach to Iran among the field of U.S. presidential candidates? I mean, differences that count.

MS. SLAVIN: Yes. I think the Democrats are more similar, and the Republicans as fairly similar, as well. Obama certainly has been the most outspoken. He said he would engage in aggressive personal democracy with Iran, and he said that very early on. Hillary Clinton has since said she would also engage in diplomacy, although she didn't promise that she would go and meet Ahmadinejad.

But she also, of course, approved of that resolution that declared that the Iranian Revolutionary Guard Corps was a terrorist organization, which many people saw as pandering to certain constituencies in this country and not perhaps adding to the debate in a helpful way.

But all the Democrats have basically said they would use diplomacy, they would seek negotiations.

The Republicans have talked about military action and have even talked about using nuclear weapons against Iran's nuclear facilities. So I think there's a rather clear distinction between the two sides.

MR. PARSI: But there is one more thing. If you take a look at those who won in Iowa, the number one, the number two, the number three on the Democratic side, including Hillary Clinton, who did say that she would negotiate without preconditions --

MS. SLAVIN: Right.

MR. PARSI: -- after all the criticism she got for the Kyl- Lieberman amendment --

MS. SLAVIN: Yeah.

MR. PARSI: -- as well as the number one on the Republican side, Huckabee, have said that they would favor direct diplomacy. I think that is quite unprecedented. I cannot recall any time since 1979 that a presidential candidate in the middle of the campaign, in the middle of the first caucuses was going out there, making a point out of wanting to pursue diplomacy with Iran. It's unprecedented.

MS. ROBBINS: Well, it's the ethanol program in Iran, actually. That's where -- (laughter) --

Trita, has Huckabee actually said he would negotiate with the Iranians? I don't think he's gone quite that far.

MR. PARSI: He's (gone ?) -- there was one --

MS. ROBBINS: He's talked about diplomacy, and he's talked about "arrogant bunker mentality" on the part of the Bush administration, but I didn't know that he actually said he would negotiate with Iran. MR. PARSI: He has said that as well. And one more interesting thing was that in one of the speeches that he gave he said that "I am a minister. I know theology. Theology is black and white. Foreign policy is not." And then he went on to very, very strong criticism of the Bush administration's policy and basically was arguing that he would follow -- this was the opening to his section on Iran.

MS. ROBBINS: That he would. Okay.

MS. SLAVIN: Okay. It's certainly intriguing.

MR. PARSI: I'm not trying to promote anyone here. (Laughter.) I just point it out.

MS. ROBBINS: So it's -- you -- it's the Bad Ney connection. (Laughter.)

Okay. I'm failing on gender balance here today. Quite a shock at the council!

Here we go.

Q Thank you very much. My name is Tala Dowlatshahi. I am the New York director of Reporters without Borders. Our organization deals a lot with journalists reporting to us from Iran. And as an Iranian, I sense that the country has a very draconian policy towards not only traditional journalists but bloggers, citizens journalists, kind of community activists. And I know that we've really approached the government-to-government dialogue, but what about the civil society-to-civil society dialogue? Because there's really an opportunity there for Iranian members of civil society to speak to members of the American civil society and share ideas and thoughts about democracy in the various ways that they think about it.

MS. ROBBINS: Can I piggyback on that? Condi Rice always talks about how much Iranians actually like Americans. I don't know. Is that true? (Laughter.) And what about this track two potential?

MS. SLAVIN: Well, on whether they like Americans, I think a lot do, but not as much as they used to. Just from my own visits there, 2001 was probably the high point. I've never had so many people come up to me, as they did after 9/11, to talk about their sympathy with the United States and their admiration for the United States. And that continued for a while.

But after -- when I went in 2006, Iranians had now seen what had happened in Iraq, and they seemed to have cooled a bit. There was a poll that was done by Reader's Digest in 2006 where young Iranians were asked who their favorite foreign leader was, and they -- the overwhelming majority said Vladimir Putin, followed by Jacques Chirac. The U.S. was popular only among the -- those above the age of 45.

MS. ROBBINS: Sort of like Hillary -- (inaudible).

MS. SLAVIN: Sort of like the Hillary vote, yeah. (Laughter.)

So I think that there's still -- there's an admiration for American pop culture and these sorts of things, but some of the love of the U.S. is really not as much as Condi would like. And Trita will talk about the -- I mean, there are still a lot of bloggers despite all the repression, and -- it's fascinating; Iran is, I think, the most wired country in the Middle East, more bloggers than any country apart from the United States and China. Iran is third -- number of blogs.

MS. ROBBINS: Can I add into this just this question about the 75 million that are supposed to exist to encourage the development of civil society inside of Iran?

MR. PARSI: I'm very grateful for that question because it's one of the things that we tend to forget. We talk so much about centrifuges and various translations of very aggressive terms, that we've really forgotten about the tremendous crackdowns that are currently taking place inside of Iran. About 150,000 people that have been arrested because they were wearing the wrong clothes. The crackdown on the NGOs that came very immediately after the announcement of the 75 million, because we basically said, "Hey, we're going to do regime change in Iran and we're going to use these civil society organizations," and in essence we put a target on their backs and ever since it's been extremely, extremely difficult for them to operate. And I can speak out of personal experience, having had a lot of contact with them, in which many of them basically saying, "Don't call me for two years, but don't lose my number."

They're afraid. They're afraid. The atmosphere has been really, really horrific for them as a result of the tensions. And the Iranian government doesn't in any way, shape or form need a pretext to clamp down its population. It has a long history of being able to do so without any outside incentives. But that still doesn't mean that we should give them any outside incentives and provide them with these pretexts.

One of the big things that is preventing these NGO-to-NGO contacts beyond the 75 million is the fact that from the U.S. side, we also have economic sanctions on Iran that prohibit anyone in this room who wants to give more than $100 to an Iranian orphanage or to an Iranian school for girls or anything of that sort. If you do that, you violate U.S. sanctions. You don't violate the Iranian law, but you violate U.S. sanctions. And as a result, that has truly killed off the opportunities for those type of exchanges for several years.

And one of the best things I think we could do in that area, instead of increasing 75 million to 150 (million), lift the sanctions on the NGOs, let American private money and private donations to go in there and let the NGO-to-NGO exchanges truly be NGO-to-NGO. With the 75 million, the government has basically imposed itself on that process. You can only deal with Iranian NGOs and get an OFAC license to do so, more or less, if you accept.

MS. ROBBINS: Office of Foreign Assets Control of the Treasury Department

MR. PARSI: If you accept the 75 million. That's the fastest track of getting an OFAC license, and that basically means that the government is imposing itself on something that is supposed to be people to people. And that has backfired, it's not helpful, and we are truly losing a tremendous asset in Iran if we see this trend in which the younger generations of Iranians are not as pro-American or as favorable towards the United States as their parents were.

MS. ROBBINS: Hey, Barbara, what has happened to -- I mean, there was this interesting brief push from some neocons in the Iran Office in the State Department, Dave Denehy in particular, for a new -- that long-going, ever-continuing review of Iran policy, and even the suggestion of calling the Iranians' bluff and offering to open an interest section on the ground in Tehran? What ever happened to that idea?

MS. SLAVIN: Well, you should know Carla wrote about this in the Wall Street Journal on the front page, and that option apparently dropped off the table. (Chuckles.) So I guess it's a warning --

MS. ROBBINS: I only use my power for evil. (Laughter.) That's the problem, you know, when you try to stay abreast of the news; sometimes it can have a harmful effect. No, I think again, the Bush administration has made it very difficult to have these sorts of openings.

I interviewed Ahmadinejad in February of 2006 and I asked him about this idea of allowing American diplomats to return to Iran, at least to be processing visas for Iranians who wanted to travel to the U.S. The way it is now, an Iranian has to go to Turkey or Dubai just to apply for the visa, and then has to come back to get it. It's very cumbersome; it's very expensive.

And so he said, you know, fine, he said, but what about my idea? He had proposed, sent a letter to the National Security Council, suggesting direct flights between Tehran and New York. And once again there was no reply from the Bush administration to his proposal. He said, well, you know, if I get a reply to this, then we'll talk about it; we'll talk about putting Americans there. Basically the sense was that without direct flights between New York and Tehran, what difference did it make if you, you know, if you could have visas there? But he seemed open to it.

Ali Larijani, who was the national security adviser at the time, also was open to it. But it wasn't really pushed by the Bush administration, and they didn't do anything else that would have made it worth Iran's while to consider this. So I think yet again it's another missed opportunity.

MS. ROBBINS: But were the neocons inside the administration, I mean, did they -- was this a call-your-bluff idea? Or was there this notion that if you had an intersection on the ground that you actually might be able to have more of a relationship with the Iranian people? And I mean, was it a serious proposal?

MS. SLAVIN: I think it depended on which neocon you're talking about. I mean, some of them might have saw it just as a way of calling Iran's bluff. But if Iran had agreed, it would be certainly, you know, just to have American diplomats on the ground in Tehran, not having to take third-person, secondhand reports of what Iran was actually about but to be able to see it with their own eyes -- that would be enormously helpful, whether you want to promote regime change or engagement or whatever. So I think it's a combination of the two.

MS. ROBBINS: Intriguing.

Jeff.

Q Thank you. Jeff Laurenti at the Century Foundation.

MS. ROBBINS: Quickly because we only have about five minutes left.

Q Got it, Carla.

I'd like to return to the question of Israel and internal Iranian politics. You've just had the Israeli officials suggesting that the rocket that hit Ashkelon was an Iranian one, suggesting an escalation in the kind of weaponry that's being delivered either to Hamas or other rejectionist groups in Gaza.

Who or where is the debate inside Iran about what kind of weapons should be supplied, the source of pressure? Would the Iranian parliamentary elections make any difference in the view of how to deal vis-a-vis Israel? Or do they view Israel as simply a bargaining chip with the larger negotiations with the U.S.?

MR. PARSI: One would wish that there would be perhaps a little bit more nuance and a little bit more debate about Israel in Iran, but there isn't. But I would like to point out a couple of things.

A: In regards to the Holocaust comments that Ahmadinejad has made, I think we have not appreciated, on this side, how embarrassed Iranians have been by those comments and that, in fact, he had also violated some of the own rules of the regime itself, because Iran is still the home of the largest Jewish community in the Middle East, outside of Israel itself. And in 1979, when the revolution happened, the Iranian community leaders, Jewish community leaders, approached Khomeini and gave an offer saying that they wanted protection. They wanted to make sure there was not going to be any clampdown on the Jewish community.

And in return they wanted the protection by him issuing a fatwa, and in return, they wanted -- they offered that the Jewish community in Iran would essentially remain somewhat anti or not terribly fond of Zionism because Zionism never really got much of a root in Iran. The Jewish agency had tremendous problems getting Iranian Jews to leave for Israel during the '70s as well, mindful of that recent story about 40 of them leaving.

The Holocaust comment, however, is not an attack on Israel. It's an attack on the entire experience of the Jewish people, and it's something that if you look closely you see no other Iranian official has repeated that. He is the only one who said it, and the reason why no one else has repeated it is not a coincidence. They've basically been forbidden from doing so.

But the question, then, if there is a new government or if there -- different faction wins the elections in the parliamentary elections, will it make it easier? I don't think at the end of the day that it will change the red lines tremendously much, but it will change the political atmosphere and hopefully open up opportunity that are, admittedly, very difficult to work out right now when Ahmadinejad is still there.

MS. ROBBINS: We are at the very end of -- this moment, actually. Is there one very, very short question to be asked?

Q Elizabeth Bramwell, Bramwell Capital. I was wondering if you could comment on Putin cozying up to Iran, and what the potential is for their really bringing Iran into their orbit.

MS. SLAVIN: I think, you know, Russia has very important interests in Iran, has very important economic interests there. Iran is a major client for Russian weapons. The Russians have done a few things to show that they're not -- that they oppose an Iranian military nuclear program, but of course, you saw after the National Intelligence Estimate came out the first thing that happened was that the Russians delivered the fuel for the reactor at Bushehr that they've been working on for years and years and years.

So I think we cannot hope for great support from the Russians without some new evidence of a military Iranian nuclear program. I think they're going to solidify their relationship with Iran.

It's useful. It shows the Bush administration that Russia cannot be taken for granted. And Iran has really been very helpful. This whole crisis has been great for Russia because of the high price of oil. Every time Ahmadinejad opens his mouth or there's an incident in the Persian Gulf, the price of oil jumps again. So they're more on the same page than not.

MR. PARSI: I would be very concerned about it, though, because I think the significance of Putin going to Tehran or the significance of Ahmadinejad going to Doha and later on to Mecca is far greater than the significance of the Syrians coming to Annapolis. And that's something we have to be worried about. And 15 years ago when at first the U.S. started to oppose more stringent sanctions on Iran, one of the arguments that was presented against it was, this will only push Iran into the orbit of Russia and China. Fifteen years later, I think we can say that was true.

But it's not irreversible. On the contrary. The Iranians are gravitating towards Russia involuntarily. Iran and Russia have had very poor relations for the last 500 years, and there truly isn't much love lost between them. But out of necessity, they will both go in that direction.

MS. ROBBINS: Well, Trita and Barbara, thank you so much. And thank everybody for really good questions. (Applause.)

END.

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